Every fall, the 60 million Americans who
use the health plan can compare options and save money. Here’s what to
consider.
By Mark Miller Oct.
4, 2019
If you’re enrolled in
Medicare but worry about the cost of health care, your chance to do
something about it is right around the corner.
Most people enroll in
Medicare when they become eligible at age 65. But every fall, they have the
opportunity to change their coverage during an enrollment season that runs from
Oct. 15 through Dec. 7. This is the time of year when you can switch between
original fee-for-service Medicare and Medicare Advantage, the all-in-one
managed care alternative to the traditional program. You also can re-evaluate
your prescription drug coverage — whether that is a stand-alone Part D plan, or
wrapped into an Advantage plan.
It’s a good idea to
do a checkup on your coverage, even if you are happy with your current choices.
Prescription drug plans often revise their lists of covered drugs, the rules
under which they will be covered and their cost sharing. If you’re enrolled in
an Advantage plan, it’s a good time to determine if your health care providers
will be in your plan during the coming year, and whether a move to original
Medicare makes sense.
Yet few Medicare
enrollees take advantage of fall enrollment. For example, research by the
Kaiser Family Foundation found that just 11 percent of Medicare Advantage
enrollees voluntarily switch plans each year. Another study,
conducted in 2013 by the foundation, found that 13 percent of Part D enrollees
switch voluntarily. Yet nearly half (46 percent) of those who did switch plans
cut their premiums at least 5 percent the following year.
“People are well aware that they should shop
and compare, but it’s a lot of work,” says Tricia Neuman, director of the
Kaiser foundation’s program on Medicare policy. “And they are not confident
they’ll be able to choose a plan that provides better value.”
Fall enrollment
provides the opportunity to make sure you’re getting the best-fit coverage and
to save some money on premiums and other out-of-pocket costs.
The most basic
Medicare enrollment decision is whether to use original fee-for-service
Medicare or an Advantage plan. Most of the 64 million people enrolled in
Medicare this year use the original program, but 34 percent are in Advantage
plans, Kaiser reports.
Advantage plans often
include extra benefits, including some level of dental, vision or hearing
services, and gym memberships. This year, most Advantage enrollees (88 percent)
are in plans that include drug coverage, and more than half of them (56
percent) pay no additional drug premium beyond their Part B premium,
according to Kaiser.
The trade-off is that
Advantage enrollees must use health care providers within their networks, or
pay more for out-of-network services.
Enrollees in original
Medicare have access to a much wider range of providers, and they do not need
to navigate the referral requirements and prior authorization steps used by
many Advantage plans.
Many enrollees in original
Medicare buy supplemental Medigap policies to cover their out-of-pocket
expenses. These can be significant.
There’s no annual limit on what you pay out of pocket; Part A (hospitalization)
has a deductible this year of $1,364 for each episode of illness, plus fixed
daily costs for extended stays. Part B (outpatient care) covers 80 percent
after you meet the annual deductible ($185 this year). Users of the original
program usually also buy a prescription drug plan, with premiums averaging just
over $33 a month this year.
But original Medicare
can be less expensive for enrollees who encounter a serious illness and use a
lot of services. That is because the annual premiums for Medigap, which cover
nearly all cost-sharing requirements in Medicare Part A and B, usually are
lower than the out-of-pocket limit found in Advantage plans.
Advantage plans are
required to cap total out-of-pocket spending — the average among all plans this
year for enrollees in H.M.O. or PPO plans is $5,059 for in-network
services, according to Kaiser;
the average limit rises to $8,818 when Advantage PPO enrollees use
out-of-network services.
Medigap premiums, by
contrast, vary greatly by region — but often it is possible to cap
out-of-pocket costs at a lower level than what is available in Advantage plans.
In New York City this year, Medigap Plan G plans, among the most comprehensive
options, range in cost annually from $2,640 to $5,460, according to
Medicare data. But in Nashville, Tenn., the same plans carry premiums ranging
from $1,044 to $2,580.
“It’s important to
look at the doctors and hospitals in the network,” Ms. Neuman said. “Many
people are less likely to think about this when they first join Medicare,
especially if they are relatively healthy. They don’t really consider whether
specialists are in network until they do get a serious illness, which may come
years after they first go on Medicare.”
Advantage enrollees
who think they may want to shift to original Medicare with a Medigap plan
should do so while they are still healthy. When you first sign up for Part B,
Medicare’s “guaranteed issue” rules forbid Medigap plans from rejecting you, or
charging a higher premium, because of any pre-existing conditions. But after
that time, Medigap plans in most states are permitted to reject your
application or charge higher premiums.
Shopping for plans
Medicare plan
searches often begin with the Medicare Plan Finder, the official government
website that posts stand-alone prescription drug, Medicare Advantage and
Medigap offerings. The plan finder is a tool that allows you to browse plan
options that match your medication and health provider needs, along with
premiums. But a recent redesign of the plan finder has prompted worries
among Medicare consumer advocates and organizations that help enrollees with
plan selection.
Several studies had
criticized the plan finder for confusing navigation and incomplete or incorrect
information. The Centers for Medicare & Medicaid Services aimed to correct
these issues with the redesign, and Medicare advocates generally say the new
tool is an improvement.
But the new plan
finder was rolled out just before Labor Day, leaving little time for Medicare
enrollment counselors to be trained and to identify problems before the busy
fall enrollment period begins. (Users can choose between the old and new sites
until Oct. 15; at that point, only the new site will be available.)
“October 15th is
right around the corner, so the lead time has been very short,” said Ann
Kayrish, senior program manager for Medicare at the National Council on Aging.
Ms. Kayrish provides training to State Health Insurance
Assistance Programs, a national network of federally funded programs
that provide free Medicare counseling using volunteers.
“SHIPs are struggling
to train their volunteers not only on the new plan finder, but also all the
changes with Medicare plans for the coming year,” she added.
The new site has
shortcomings. After a detailed review, the Medicare Rights Center, an
advocacy group, wrote to CMS this month calling for changes that are “urgently
needed” before fall enrollment to improve the tool’s accuracy and usability. A
key criticism is that the new tool does not allow users to sort plans by total
out-of-pocket costs, including premiums but also deductibles, copays and
coinsurance payments. That feature was available in the old plan
finder.
“There are an
overwhelming number of plans available, and our hope is that this new tool will
make it easier for people to choose the best plan option with respect to
affordability and coverage,” says Frederic Riccardi, president of the
Medicare Rights Center. “People are at risk of having to pay more for their drugs
or plan by not reviewing their coverage. It concerns me that people pay more
than they should or go without their prescription drugs due to plan
restrictions.”
CMS declined to
comment for this article, but in a posted FAQ about
the new site it stated that a cost filter would be added, and that its
plan to do so was “on track.”
The plan finder also
lacks detailed information on health care providers in Advantage plans. That
leaves enrollees the challenging task of reviewing directories provided by
individual plan providers.
“Some plans give
customers access to online search tools to look up a particular doctor or
hospital,” Ms. Neuman said. “Others send out a PDF of a big, fat directory that
you can look through.”
Directories often can
be outdated or contain errors, studies have found. So it makes sense to ask
your doctors and other providers directly if they participate in any plan you
are considering.
The new plan finder
also does not yet allow users to search for Medicare Advantage plans that will
offer new nonmedical services next year.
The Chronic Care Act, approved by Congress last year,
permits plans to begin paying for services such as grocery deliveries,
caregiver support and retrofitting homes to support older adults with chronic
conditions. They also are permitted to expand transportation services, which
had been limited to visits to health care providers.
Advantage plans are
not required to offer the new services, and they will be available on a very
limited basis during 2020. Aetna, for example, expects to offer the expanded
transportation services, fall prevention and help with meal preparation in just
a few plans next year, said Christopher Ciano, senior vice president of
Aetna Medicare.
“We’re still in a
test and learning mode,” Mr. Ciano said.
Just as important,
joining a plan that offers the new nonmedical benefits does not guarantee that
you’ll receive them. The new benefits are targeted to enrollees with serious
chronic illnesses or functional limitations, and Advantage plans will determine
who qualifies. (Separately, President Trump signed an executive order this week instructing
Medicare officials to propose ways to further beef up Advantage offerings and
reduce their premiums. The executive order will not affect Advantage plan
offerings for 2020.)
For now, the best way
to find plans offering the new services is to contact plan providers by phone.
But it’s not advisable to drive a plan choice solely by these new benefits,
experts caution.
“It’s important to
look beyond additional benefits, such as dental coverage or these new
nonmedical services,” Mr. Riccardi said. “You need to look at the entire picture
— the network of providers and cost-sharing for health services offered by the
plan.”
Shopping tips
The choices facing
Medicare enrollees are complex, and it makes sense to get some unbiased help.
The State Health Insurance Assistance Program provides free one-on-one
counseling every year to nearly three million beneficiaries, their families and
caregivers. Each state has a SHIP program; use
this link to find yours.
The Medicare Rights
Center suggests signing up for plans by contacting the program directly at
1-800-MEDICARE. Take detailed notes on your conversation, including the date
and the Medicare representative’s name to protect yourself if you encounter any
problems with enrollment.
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